$35K loan to Fraga in a legal gray area

City law limits an individual’s campaign contributions to a City Council candidate to $5,000 per election. But loans are apparently an open question, said City Attorney David Feldman.

So Feldman doesn’t know if a $35,000 loan to City Council At-Large Position 2 candidate Bolivar Fraga is legal. Feldman said he’ll ask the Texas Ethics Commission for an opinion in the next few days.

In his most recent campaign finance report, Fraga discloses the loan from his uncle, businessman Lupe Fraga, on Sept. 29. It accounts for a big chunk of the $55,000 Fraga raised in the past three months in his quest for the seat being vacated by the termed-out Sue Lovell.

Candidate Fraga said he had his campaign staff cleared the loan with the TEC before he accepted it.

As Feldman explained it, the state says a loan from anyone other than the candidate or a lending institution is a contribution. But the state places no cap on individual contributions to non-judicial candidates, so the size of the loan doesn’t matter.

The city, though, has its own campaign finance rules, including the aforementioned $5,000 contribution cap. City ordinance does not address the question of whether a loan is a contribution, Feldman said. The question is whether the state definition of a loan as a contribution applies to Houston city candidates.

Feldman said he will look for the TEC to make the call.

“If they punt it back, I would issue an opinion based on what other analogous circumstances I could find,” he said, meaning how other cities have handled it.

Fraga said he intends to hold the money in reserve as he attempts to raise more money in donations.

“My first priority is not to spend it,” he said, but he acknowledged $35,000 could go a long way in a race where it’s tough to break through the chatter of a 10-candidate field.

Mr. Lupe Fraga is an honorable man, former Texas A&M regent, and former head of the Hispanic Chamber of Commerce. Also, was chosen as Latino Businessman of the Year by one of the Hispanic monthly magazines a few years ago. FYI – Mr. Lupe Fraga does not even run Tejas Office Supply since his daughter and son run that business.

[...] I owe a big thanks to Greg’s Opinion, Off The Kuff, Bay Area Houston and the Houston Chronicle. Collectively they wrote at least five posts over seven days referencing a questionable $35,000 [...]